The Southern California city of San Bernardino wants to repay its pension bondholders just a penny on the dollar while paying the state pension fund CalPERS in full under its long-awaited bankruptcy exit plan released yesterday, Reuters reported. Under the city’s plan of adjustment, San Bernardino also intends to virtually eliminate retiree health insurance costs, and outsource its fire, emergency response and trash services. San Bernardino's bankruptcy blueprint follows the approach taken in the recent bankruptcies of Detroit and Stockton, Calif., where bondholder debt and retiree healthcare costs were slashed or eliminated, while pensions emerged relatively unscathed. San Bernardino proposes paying the Luxembourg-based bank EEPK, along with Ambac Assurance Corp, which insures a portion of the pension bonds, and Wells Fargo, the bond trustee, have the $50 million principal amount of their debt slashed to just $500,000, or a penny on the dollar, under the bankruptcy plan.
